The U.S. Senate unanimously passed a bill on March 3 introduced by U.S. Sen. Joni Ernst (R-IA) to reform the Small Business Innovation Research and Small Business Technology Transfer programs, known as SBIR-STTR.
Sen. Ernst’s bill, the Small Business Innovation and Economic Security Act, S. 3971, addresses what she says are longstanding flaws in the programs, which are designed to serve as America’s seed fund for small businesses but have instead been dominated by large companies while failing to protect taxpayer-funded technologies from foreign influence.
“For too long, our nation’s seed fund programs, SBIR and STTR, have been allowed to prioritize a few large companies over truly small businesses,” the senator said in a speech on the Senate floor. “Until now, these programs received blank checks to squander tax dollars meant to advance innovation in our national interest and have not protected taxpayer-funded technologies from foreign influence.
Key reforms in the legislation include strengthening due diligence standards to guard against Chinese espionage; requiring for the first time an annual limit on applications to prioritize truly small businesses; and establishing a first-of-its-kind Strategic Breakthrough awards program that would require matching dollars from recipients.
The legislation also improves data collection and reporting to increase transparency in how tax dollars are spent, according to a bill summary.
“When confronted with the status quo of the SBIR program, I knew I could no longer let China win, allow waste to run rampant, fail our warfighters, or let large companies crowd out actual small businesses,” said Sen. Ernst, chair of the Senate Committee on Small Business and Entrepreneurship. “Now, with these commonsense changes, America’s seed fund can serve our truly small businesses.”